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Purplebricks’ bosses in the UK and US quit at the same time as revenue target slips by 20%

Hybrid agency says Lee Wainright and Eric Eckardt are to leave the business 'soon' as predicted turnover for year slips significantly.

Nigel Lewis

Purplebricks has made the shock announcement that its CEOs in both the UK and US are to leave the hybrid agency at the same time.

The statement has been made as the company has cut its revenue forecast for the year by 20% from between £165m and £175m to between £130m and £140m. It says the “anticipated amount of recognisable revenue will not be sufficient to meet expectations for this financial year”.

“Although there are macro and industry headwinds across markets we are well placed to capitalise on the significant opportunity for growth that exists in each country, albeit not entirely as we would have wanted before our year end,” says Group Chief Executive Michael Bruce.

The drop in its predicted earnings comes just two months after the hybrid agency reduced its upper forecast for the year from £185m to £175m.

UK chief Lee Wainright is to quit the hybrid agency ‘shortly’ for personal reason after just two years at the helm. Eric Eckhard, who has run its US operation also for two years, is leaving too although Purplebricks’ has given no reason for his departure.

In the UK Wainright’s role is to be filled for the time being by Vic Darvey (left), the company’s global Chief Operating Officer who joined earlier this year from MoneySuperMarket.com.

“Lee played an important role in helping Purplebricks become the UK’s largest estate agent,” the company says.

In the US Eckhard’s departure has triggered Group CEO Michael Bruce to step in and run the operation, who says he is “excited to be taking the reins of the US business”.

“The UK is leading the way with continued profitable growth and a strategy to deliver greater success,” he says. “The Board remains confident of the long-term growth potential of the business and the opportunity to deliver substantial value for shareholders.”

February 21, 2019


  1. Since 2018, I have been stating that Purblebricks will never make a profit, and never pay a dividend, I stand by this. My only wonder is why it has taken the shareholders so long to catch on to this.

    Fundamentals of business are that if it cost £2,000 minimum to sell a property, if you charge under this, you lose money. You may have a large pile of cash coming in through the front door as ‘upfront fees’ but if you are spending all that money and more on running the operation and running TV adverts bashing agents for charging commission for a no sale no fee basis, then one day everyone realises that the model just does not work. And with no adverts on the TV and not a single bricks and mortar branch in the high street, soon it will be Purple Who?

    The fall out from this I think Purple Bricks and other pay upfront online agencies are going to come under increasing scrutiny as many vendors appear to be paying upfront and receiving nothing in return, and the figures appear to be very large.

    If you look very closely at this independent analysis commissioned by Purple Bricks by the data experts twentyci which cover the financial year 2017 to 2018, available online on the Purple Bricks website under investors on the title page, there seems to be some contradictory claims.

    In the twentyci report, and I quote ‘Purple Bricks were looking for a reliable, respected and independent data source to establish answers to a set of questions about their performance in the financial year 17/18′ And Purple Bricks are … ‘No1 at selling houses: 81% of listings sold within 12 months’

    Then there is a helpful graph in the same report which shows an annual picture of Purple Bricks results, it shows 64,000 new instructions, 48,000 properties sold subject to contract and it shows 38,000 properties exchanged.

    Now the ratio of exchanges to new instructions 64,000 to exchanges 38,000 is 59%, so Purple Bricks are not selling 81% of the instructions.

    But the worrying thing is, if the company gets 59% of vendors exchanged, it fails to get 41% sold or exchanged but still charges them on average £1,100 as an upfront non refundable fee, which is 41% of 64,000 vendors at £1,100 or 28.86M of fee for nothing.

    Readers of this are going to say the figures are wrong and skewed etc, but twentyci also did a similar report on Emoov and Tepilo, post the recent failure of these two online companies.

    And the WHICH organization recently had sight of this twentyci report and said that the conversion rate of the online pay upfront company was 53% of instructions to sold subject to contract, if you then discount the 53% by 30% the usual industry fall off for cancelled sales you get to an exchange rate of around 37%. This is available on the WHICH site online.

    In this piece by WHICH, it is stated that the ‘Major online estate agent Emoov, which also owns Tepilo, has gone into administration, potentially leaving thousands of home-sellers out of pocket by as much as £2,995.

    James Cowper Kreston, the firm appointed to act as administrators for Emoov, says the company currently has 5,000 properties listed for sale or sold subject to contract. Of this total, around 80% have paid upfront for the service and are at risk of losing money from the collapse.’

    Also, WHICH states, ‘Exclusive data provided to us by TwentyCi shows that over the past 365 days, Emoov had approximately 8,000 new instructions. The firm accounted for approximately 0.5% of the estate agency market in 2018.

    Around 53% of new instructions received by Emoov typically went on to be ‘sold subject to contract’ and the average price of a property listing was £375,000. Tepilo’s figures are rolled into this data as its activity is merged with Emoov.

    Now for a very long time I have been saying that online pay upfront agents should be telling potential clients the true conversion rate of their service, and I wrote a recent article using data from Rightmove on – Tuesday November 13 2018 – (prior to the collapse of Emoov and Tepilo).

    As it roughly gives a market snapshot of the then six major online brands (two under the ownership of Emoov).

    These were the figures from Rightmove.

    Doorsteps – 2,054 properties listed, 1,321 for sale, 733 under offer not exchanged, 28% conversion of listed to sold subject to contract.

    Yopa – 5,501 properties listed, 3,539 for sale, 1,962 under offer not exchanged, 35% conversion rate.

    Purplebricks – 37,531 properties listed, 21,142 for sale, 16,389 under offer, 43% conversion rate.

    Emoov – 2,504 properties listed, 1,696 for sale, 808 under offer, 32% conversion rate.

    Tepilo (owned by Emoov) – 1,740 properties listed, 1,162 for sale, 587 under offer, 33% conversion rate.

    HouseSimple – 1,140 properties listed, 763 for sale, 341 under offer, 30% conversion rate.

    You will notice that Emoov and Tepilo, had a conversion rate around 32%, which if you take the 53% figure being instructions converted to sold subject to contract as in the twentyci report, and then say the normal fall through rate for the property industry of 30% between sold subject to contract and exchanged was slightly higher for these two brands, say a 35% fall through rate you get to the 32% exchange rate, reflected in the Rightmove figures which would mean 68% of Emoov/Tepilo vendors mostly paid upfront for nothing.

    Emoov had its assets bought and the word is that they are going to be re-born in 2019, time will tell.

  2. and the share price swiftly drops 25%! I wonder if the two outgoing CEOs sold any shares prior to the announcement?

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